* Canadian dollar at C$1.2433, or 80.43 U.S. cents
* Oil rises to its highest since May 2015
* Bond prices lower across a steeper yield curve
* 2-year yield touches a six-year high at 1.799 percent
TORONTO, Jan 9 (Reuters) - The Canadian dollar edged lower
against its U.S. counterpart on Tuesday as a stronger greenback
offset higher prices for crude oil, one of Canada's major
exports.
The U.S. dollar rose to an 11-day high against a
basket of major currencies, continuing a recovery from
four-month lows plumbed at the start of the year.
Oil rose to its highest since May 2015, supported by
OPEC-led production cuts and expectations U.S. crude inventories
fell for an eighth week.
U.S. crude prices were up 0.75 percent at $62.19 a
barrel.
At 9:14 a.m. EST (1414 GMT), the Canadian dollar
was trading at C$1.2433 to the greenback, or 80.43 U.S. cents,
down 0.1 percent. The currency traded in a range of C$1.2399 to
C$1.2448.
The loonie touched its strongest level in three months at
C$1.2355 on Friday after stronger-than-expected domestic jobs
data prompted investors to bet on a Bank of Canada interest rate
hike as soon as Jan. 17.
Chances of a rate hike next week have more than doubled to
80 percent since the jobs data, the overnight index swaps market
indicated. They got a further boost from a Bank of Canada
business survey on Monday that showed optimism.
Canadian government bond prices were lower across a steeper
yield curve, with the two-year down 2 Canadian cents
to yield 1.796 percent and the 10-year falling 22
Canadian cents to yield 2.184 percent.
The 2-year yield touched its highest intraday since June
2011 at 1.799 percent.
Canadian housing starts fell in December to a seasonally
adjusted annual rate of 216,980 from November's downwardly
revised 251,675. Economists had expected a decline to a 212,500
annual rate.
(Reporting by Fergal Smith; Editing by Andrew Hay)